Use tobacco funds

March 09, 2011

Nearly 42,000 Pennsylvanians lost their adultBasic insurance coverage last week.

Another 494,787 people had been on the waiting list to get such coverage. Pennsylvania’s adultBasic insurance was created in 2001 and is one of only a handful of entirely state-funded health plans to provide insurance to low-income adults who do not qualify for Medicaid. It is paid for through a combination of money from the state’s tobacco settlement and donations from the state’s four Blue Cross and Blue Shield insurance companies.

State Attorney General Jack Wagner released the results of a special audit that showed $1.34 billion in tobacco settlement funds were diverted away from the program. Part of the money — $121 million — was put in the state teachers pension fund. The insurers have kept adultBasic going, but Blue Cross-Blue Shield insurance providers have refused to extend the voluntary, six-year agreement.

The annual tobacco settlement payments of about $370 million will continue for another 15 years. Some of the money should be used to restart adultBasic until health insurance under the federal health care reform is available in 2014.